Regency Petroleum Limited (RPL), a leading petroleum marketing company, is set to broaden its footprint beyond its stronghold in Westmoreland by opening its first service station in Kingston this September. This move is part of RPL’s strategic plan to expand its presence islandwide, which was previously announced and is now coming to fruition.
Andrew Williams, CEO of Regency Petroleum, shared the company’s vision during a recent earnings call for its second quarter (Q2) results, stating, “We want to grow across the country, and we want to employ Jamaicans to work for a Jamaican company.” This expansion into the Corporate Area marks a significant step towards RPL’s goal of establishing a nationwide network of service stations.
The company’s financial performance in Q2 of 2024 highlights its robust growth trajectory. Sales surged by 168 per cent to $482 million, far exceeding expectations, while net profit climbed by 86 per cent to $26.4 million, up from $14.2 million in the same quarter of 2023. RPL’s revenue also saw substantial growth, increasing by 144 per cent to $886 million. These results have instilled confidence in shareholders, who anticipate substantial sales volume increases in the coming quarters, particularly once the new service stations become operational. Williams noted that the newly opened Paradise and Negril service stations accounted for a significant portion of this revenue, generating between 75-80 per cent, with 55-70 per cent of that coming from the Negril location.
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Looking ahead, Williams is optimistic about the fourth quarter, expecting a considerable boost in sales with the Kingston location opening its doors. Despite some delays at its Spanish Town Road site, RPL remains on track to begin operations in Kingston next month.
In addition to expanding in Kingston, RPL is eyeing further growth along Jamaica’s south coast, with multiple service stations in various stages of negotiation and pending approval. The company is also forging new partnerships to bolster its market presence. A recently finalized agreement with JusGas Distributors Limited, a local gas retailer, positions JusGas as the primary distributor of RPL’s bulk cooking gas in the Corporate Area. This partnership represents a significant opportunity for RPL to penetrate the cooking gas market more effectively.
Moreover, RPL is venturing into franchising, with its first franchise location set to open along the main road from Westmoreland to Montego Bay, at the Whithorn Service Station. The franchising initiative will cover both motor fuel and Liquified Petroleum Gas (LPG). Williams clarified the company’s LPG franchising policy during virtual sessions with shareholders, noting that a minimum capital outlay of $30 million through JusGas is required for bulk LPG franchises, while partnerships for household cylinders require an investment of $12-15 million.
“We are open to the franchise on the LPG, and there are many different variations of the type of franchise we can have,” Williams explained, highlighting the company’s flexible approach to franchising.
RPL’s primary focus remains on expanding its automotive retail operations, but the company is also committed to growing its LPG business line. While RPL has experienced organic growth in this sector, it is taking a measured approach to capital expenditure, reinvesting profits from the LPG division to ensure sustainable growth.
Starting with three service stations and over 70 employees, Regency Petroleum has ambitious plans for the future. With the opening of its Kingston location, RPL aims to establish a presence in prime areas across Jamaica by 2030, targeting at least one service station in each parish. This expansion not only reflects RPL’s growth ambitions but also its commitment to contributing to Jamaica’s economic development by creating job opportunities and providing reliable energy solutions.
